RENO, Nevada IC market researcher Databeans Inc. is predicting that China's demand for semiconductors will increase by 34.9 percent in 2004 to $30.9 billion. The forecast is up from $22.9 billion in 2003.
However, by 2005 growth may collapse to just 6.7 percent, or $33 billion, the research firm forecasted. The following years will see growth in excess of 20 percent until in 2009, when China's IC consumption could reach 25 percent of worldwide IC revenues, or $69 billion.
The rapid growth in telecommunications manufacturing along with growing capacity in the consumer and computer markets are spurring growth, which is expected to achieve a compound annual growth rate of 17 percent between 2003 and 2009.
China's largest markets in terms of IC demand are computers and communications. Demand in the computer segment amounted to an estimated $9.3 billion in 2003, and the forecast calls for an average increase of 15 percent through 2009.
Communications is the fastest-growing segment with an average annual growth rate of 21 percent.
Computer demand in 2004 should account for $11.7 billion, communications for $10.5 billion and consumer electronics for $7.7 billion, DataBeans said.
Typically, foreign companies provide raw materials while assembly takes place in China. Products are then sold overseas. However, both domestic demand and investment are increasing. China is quickly outpacing some of the world's largest manufacturing centers, the reseaarchers said.
According to China's Ministry of Information Industries, 50 percent of film cameras, 30 percent of TVs, 30 percent of air conditioners, 25 percent of washing machines and 20 percent of refrigerators are produced or assembled domestically.
Databeans estimated that China will also produce more than one third of the world's mobile phones, 17 percent of digital cameras, 20 percent of DVD players and 28 percent of routers and modems.